04/21/05 Death tax repeal debate

04/21/05 Death tax repeal debate

When the U.S. House of Representatives last week took up consideration of permanent repeal of the federal Estate Tax, the so-called Death Tax, it was not the first time Congress attempted to tackle the issue. Such a measure passed in both houses of Congress in the late 1990's only to have it vetoed by then President Clinton. The next time the Estate Tax was addressed in Congress, in 2001, taxation rates depending on value of assets ranged from thirty seven to fifty five per cent. Congress passed an act that year to increase the exemption of tax free assets given heirs and decrease the estate tax rate down to zero by the year 2010. However, unless Congress permanently repeals the Death Tax, it is reinstated in 2011 at 2001 tax levels. That is one reason members of the House and Senate have been working at permanent repeal. One Northwest representative supporting the estate tax repeal is Washington's Cathy McMorris. MCMORRIS: Growing up on a family farm in Eastern Washington, I've seen first hand the negative impacts the Death Tax has on our families and our businesses. One of my top priorities in Congress is to grow jobs and expand the economy in the Pacific Northwest. And I believe the repeal of the Death Tax will help us accomplish this goal. But some House Democrats offered an alternative. That measure would have increased the exemption of an estate's value from taxation to $3.5 million dollars, exempting almost ninety-eight per cent of estates from the inheritance tax according to one tax policy organization. Backing the Democratic alternative was Oregon Representative Earl Blumenthal. BLOOMENTHAL: And it will provide resources so that we can solve problems like social security and the alternative minimum tax, and be about our business. In the end, the House approved a permanent appeal of the estate tax. The measure now goes to the Senate for its consideration sometime later this summer. However, reports are that there are votes shy of the sixty vote supermajority needed to pass the measure for now. There is talk and apparent negotiation in the Senate that would pass some sort of permanent estate tax reduction and repeal rather than a full repeal. Representative Doc Hastings of Washington says while this may be what is needed to end the harsh realities of the estate tax; a full repeal would be the best way to go. HASTINGS: The end result that the Senate takes up will be what they can get enough votes for. But I fundamentally believe that the Death Tax is a classic case of double taxation and that it ought to be eliminated totally.
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